Is Pax Americana like Britain was a hundred years ago? (Cartoon courtesy - mpg50.com.). Click for larger image.

Fat and lazy

Between 1875-1935, Britain was dependent on India for gunpowder, on USA and Iran for oil, on Malaya and India for rubber. British economy had grown fat and uncompetitive – unlike Italian, German and Japanese economies.

Even though Britain won WWII, their economy was a lost cause. Though Germany, Italy and Japan were losers, with their economy in shambles, they could make a brilliant recovery and vastly out-compete Britain.

The story of Middle East oil is similar for USA and West. The Welfare State, built on a diet of cheap oil, easy dollars, is now too expensive for the West to sustain. The above book extract gives an excellent snapshot of the oil industry in the 20th century.

The difference between 'civilized' West and 'barbaric' Islamic world. (Cartoon by John Cole; courtesy - caglecartoons.com). Click for original image.

Things go bump in the night

In the early hours of 2nd May, 2011, an obscure twitter-user started tweeting about the US raid on Osama Bin Laden’s safe-house – 35 km from Islamabad, 200 miles south of the Afghanistan border, in Abbottabad. In a city, which houses Pakistan’s equivalent of Indian Military Academy.

It is election time in USA

Pakistan was not alone in using Osama. Osama alive was source of US funds for Pakistan. Osama dead is an election ticket and a feel-good factor for the a USA being battered by the Great Recession. As Rajiv Dogra points out, on the opposite side of the world,

The timing suited Obama well. It had long been speculated that Osama would be killed around the time Obama’s re-election campaign kicked off.

Pakistan's soldiers patrolling the tribal area of Ditta Kheil in North Waziristan for militants and al-Qaida activists in March.| Photograph by Mohammad Iqbal/Associated Press | Picture courtesy nytimes.com /Click for original image.

On a lighter – and logical side

Famous for the song केम छे‘kem che, kem che’ from the film जिस देश में गंगा रहता है Jis Desh Mein Ganga Rahta Hain, a Bollywood songwriter confidently predicted, soon after 9/11, that Bin Laden would be found near the White House or Islamabad!

Coming to India

After WWII, as British, French and Dutch colonialists were being thrown out of Asia, in country after country, the West was in real danger of losing markets and raw material sources.

To make war palatable, Desert Bloc invented religion. (Image source - http://loonpond.blogspot.com; artist attribution not available at image source).

A new power, fueled by a growing migrant population, USA, took the place of tired, old powers – Britain, France and the Dutch. Instead of the openly exploitative system of European powers directly running colonial governments in these Asian countries, the US installed an opaque system – which is equally exploitative. To impose its writ on the newly independent Asian countries, the US simply destroyed their economies by war. The USA, then instituted the innovative USCAP Program and ‘helped’ these countries. These countries (Taiwan, Singapore, Japan, South Korea, Indonesia, Malaysia, et al) were now ruled by overtly independent regimes – but covertly, client states of the USA.

US multinationals and home-grown oligarchs (keiretsus, chaebols, etc.) took over the economy – and sidelined British, French and Dutch companies. To impose this economic model, US armies, using nearly 1 million troops, killed 50 lakh Asians. The takeover of European colonial possessions by the USA was handled over 3 regimes of Eisenhower-Kennedy-Johnson seamlessly.

Between a rampant USA, behind biggest terror spots of the world, and a nuclear-armed, imploding Pakistan, India’s choices are difficult – and reactive policies inadequate.

Once more, Osama’s death and Obama’s antics bring out India’s policy inadequacy in sharp relief.

The official spokesman at the US State Department, PJ Crowley, resigned. His

resignation followed Crowley’s remarks to an MIT seminar last week about Manning’s treatment in military prison.

Crowley had said: “What is being done to Bradley Manning is ridiculous and counterproductive and stupid on the part of the department of defence.”

Glenn Greenwald, a Salon reporter who has been outspoken about Manning’s detention, tweeted that “detainee abuse is allowed, speaking out against it isn’t”.

Last week, Manning gave his own account of how he is being held, saying that it was harsh treatment designed to punish him even before he was put on trial. He said he was stripped naked every night after he made a sarcastic comment to guards about the absurdity of the regime he was under.

What is the real story …

Crowley was not a critic – or even dissenting. He was an establishment man – concerned that Manning’s treatment may ‘impact on global standing and leadership’ of Pax Americana. Was this display of power more important than the display of ‘freedom’?

Siamese’ triplets

The Great Recession is like a case of conjoined triplets.

One is the USA – who has used their Bretton Woods licence to print dollars and flood the world market with excess liquidity. The US has also used their ‘dollar power’ to gain loyalty by favouring their allies, satellites and client states with low exchange rates that boost exports. Europe, Japan, Asian Tigers, (and now) China have all been favored with a ‘beneficial’ exchange rate in the past. At an ‘appropriate’ time, this ‘benefit’ was taken away. The US gained by ‘recruiting’ low-cost labour of these economies.

The US 'out-thunk' the Euro-zone on the Euro-currency strategy!

US imports, were underwritten by an increasing volume of IOUs, denominated in depreciating dollars. By paying for imports with IOU notes, the US could subsidize their high-cost exports, to these ‘semi-captive’ markets.

With dollar IOUs and dollar liquidity, US funded hi-tech R&D, overseas acquisitions (of companies, raw materials, allies), commercialize new technologies and standards (internet, software) space and defense, et al. Last forty-year estimates, show that US obtained funding equal to one full year’s US GDP. At nil cost!

All this due to the US dollar’s reserve currency status!

Can Europe be far behind

The Euro unwinds!

Post-Plaza Accord, Europe decided to get into ‘reserve-currency’ game, with the launch of the Euro currency in Jan 2002. As an incentive to TT-Note holders, the ECB ‘allowed’ the Euro to appreciate – vis-à-vis the dollar. This gave windfall gains to countries holding Euro as a reserve currency.

From dollar parity in 2002, the EU appreciated by more than 60%. After the introduction of Euro, in the first six years, Euro-bond holders hit a gusher. Anyone who held Euro bonds from January 2002 upto Decemeber 2007, would have made some 80% return during this six years. A return of 15% per annum. Close to junk bond returns.

After the ECB took the bait, the US played a waiting game. After running with the overvaluation bait, for 8 years, the Euro- fish is now tired. It is not able to break free of the over-valuation hook. The US is now reeling in the fish.

With a ‘strong’ currency, the option for Euro-zone is massive and painful deflation. Wages, pensions, prices, welfare state benefits will need to come down – and drastically. Do they have the steel or the hunger to do this. Used to a gold-plated Welfare State, Euro-zone does not have the moral resolve to go on a cold turkey diet of frugality.

There are three separate reasons for this … The reasons refer to the broad determinants of economic growth — capital, labour and productivity.

On the first, India is investing at the same rate as China (approximately 40 per cent of GDP), on the second, India’s labour force growth is about 1.8 per cent per year faster than China, and on the third, China has outpaced India by about 2 per cent per annum (for the last five years).

Most of this outpacing has had to do with the deep and deeper currency undervaluation practised by the Chinese authorities which led to two unsatisfactory outcomes: the great financial crisis of 2008, and now the largest and fastest growing polluter of the world.

For how long will the international community stand idly by? Not very, and this is the first big forecast for the ensuing decade: China’s exchange rate will appreciate significantly starting 2010. How significantly? A first year appreciation to about 6 yuan per dollar from the present 6.8 level. (via Surjit S Bhalla: India’s Shining Decade).

The Great Leap Forward began in 1957-58, saw famine and hunger across China. After the Communist takeover of China, land seized from land owners, was given to peasants in 1949. Ten years later, in 1959, the Chinese State took away the same land from the same peasant. Food shortages, starvation followed. Western (questionable) estimates are that 30 million people died during this period. War with India followed in 1962 – a diversion from the domestic Chinese catastrophe.

What will it be this time?

The approaching mayhem

The next few years will be tumultuous for China.

Much like, when Europe was weaned off the low exchange rate crutch in 1967-1974 period. Stagflation, oil shock, the Nixon Chop followed. How Japan had to live with endaka, the Plaza accord, with S&L crisis in the US. Or the Asian Tigers had to reset to a higher exchange rate and higher foreign reserves, that accompanied the 1997 (Asian Crisis) to 2000 (The Tech meltdown).

What will follow the Chinese moment in the sun? What will set off economic mayhem in China?

Most films that have any Chinese element in it, (actors, directors, characters, locations) end up having the Chinese underworld as an important part of the storyline. Is it that the Chinese are morbidly fascinated by criminals and the underworld – much like Europe was with English pirates and murdering Spanish Conquistadors.

Ranging from Jet Li in Kiss of the Dragon, (Jet Li takes on the French mafia) or Chow Yun-Fat in The Corrupter (exposing police-underworld nexus and corruption in the USA), or Jackie Chan in Rush Hour series or the Chinese Ric Young in The Transporter, Jet Li in Lethal Weapon 4.

All have two elements in common.One is the pervasive Chinese underworld. Across Europe, in the USA. In drugs, fake currency, in smuggling boat people, the Chinese are there – everywhere. Many of these movies have Chinese stars, directed by Chinese directors or even partly funded by Chinese studios .

The second is the absence of the Buddhist monk.

India – the loose cannon!

What kind of ending will we see ...?

Now, India is one box which defies description. By any global and historical standards, the country should not even exist – much less prosper, or be a significant global player. Too many languages, too much poverty, too much freedom, too many political parties, too many languages, too many religions, too many racial types are the common factors going against India (so goes the Desert Bloc narrative).

In such a situation, even in India, for the Westernized types or the remnants of the Desert Bloc admirers, India remains a failure waiting to happen.

Unfortunately, for these doubting Cassandra’s, India has proven them wrong for more than 5000 years now!

As President-elect Barack Obama prepares to take office this month, he has avoided the fawning praise of India that has become fashionable in some Washington circles. But experts on the region say that India-US ties now have a momentum of their own. Industries in each country now have a vested interest in deepening ties with their counterparts.

American policymakers began regarding Israeli strength as an American asset in the Cold War, they supported significant aid as a matter of strategy, not charity. … American aid continues to flow to Israel. … critics on the opposite end of the political spectrum argue that while aid to Israel may be tied to the best of intentions, it does more harm than good to the Jewish State by propping up a big and inefficient government and making Israel dependent upon the U.S.

“Israel is the only country that receives all of its U.S. aid in a single package, while others only receive it in quarterly installments.” It continues, “Most recipients of military aid are obliged to spend it in the US but Israel is permitted to spend 25 percent of what it receives to subsidize its own defence industry,”…

Doubtful motives, suspect intentions

Three aspects of the Israeli behaviour makes Israeli intentions doubtful.

One – Israel surely knows that US support cannot continue ad infinitum. What will be the Israeli response after they stop getting US support?

Two – After consistent and constant efforts to make enemies, over the last 50 years, how does Israel plan to continue living in a hostile neighbourhood – without American aid?

Three – With a population of little over 50 lakhs (5 million) in Israel and a world Jewish population of less than 1.3 crores (13 million), how does the Jewish population stop itself from going extinct?

Nothing in our modern democracy, nor anything in our political culture that is over two millennia old, permits the ascendance of a ruler who lacks compassion for the people. In our myths, our history and our practice as citizens of a free and democratic country, there is no warrant for the exercise of unbridled power, or for a leader who fails the Kalinga test. (viaModi fails the Kalinga test- Opinion-The Economic Times).

Ananya Vajpeyi, teaches at the University of Massachusets, Boston. A ‘concerned’ NRI, she is cautioning her unlettered and unsophisticated‘desi brethren’ about the dangers of electing Narendra Modi. The basis of her fears – a highly critical (of Narendra Modi) article in a US magazine The Atlantic, by a influential journalist, Robert D Kaplan (extracted and linked above).

Secondly, and sadly, the hatchet job done by Robert Kaplan suffers from many infirmities – none of which you point out. What Robert Kaplan has done is use Narendra Modi as a human shield to attack India – secure in the belief that ‘no one will dare defend Narendra Modi’.

One – ‘Free’ India made bad and the wrong choices

Look at Kaplan’s statement on India’s post colonial choices “to protect the poor against the ravages of capitalism, which benefits only the majority rather than everyone”

Same difference …

No one, but no one, in their right minds, (Kaplan excepting) will ever state that Capitalism ‘benefits only the majority’. Capitalism benefited a small minority, who were allowed to concentrate and control the means of production – and enrich themselves; usually through Corporations.

India’s post-colonial choices were a mix of pragmatism, necessity and accepted wisdom of the times – and Western pressures and influences that are responsible for more than a fair share of guilt in these wrong choices.

India manages the aspirations of nearly 17 crore Muslims – which is equal to half the population of the entire US of A. Get a minority population of that size, and then Mr.Kaplan, we will talk about the Gujarat riots.

In case you don’t remember, a simple marker for persecution Kaplanbhai, is decline in populations. Has the Muslim population in India declined? Like the Native American population has or the post-bellum African-American population has declined (in comparison to the ante-bellum)? Or the Jewish and and Roma Gypsy populations has (ignoring the limited population recovery of Roma Gypsies in post WW2 West). Or the reduction due to genocide of the poor Congolese by the Belgian emperor.

All the “social homogenization that globalization engenders” I have seen in India is how Western culture and content (TV shows, Hollywood, etc.) continues to remain a flop show!

I have no clue where Kaplan gets his data or opinions from?

Three -The argumentative Indian

The Kalinga effect.

I always thought Ashoka’s change in heart was a universal lesson – especially for the war-mongering Desert Bloc killlers – like George Bush! Modi looked away while some (estimated) 2000 Muslims were killed in riots. George Bush was looking, everyday, at more people getting killed in Afghanistan and Iraq (20 lakhs (2 million) at last count) than in Gujarat. What about the various US Governors who looked away as more than 2000 killed in riots at Queens, Bronx and Haarlem?

Is it that only Indians (especially Hindus) are supposed to be moral, Bhai Kaplan? King Ashoka is a lesson in history for all war mongers – and not Indians alone, Mr.Kaplan! Is it that Indians will be always be held to higher standards – while the West (and the Desert Bloc in general) can keep getting away with murder, genocide and massacres?

A common derisive Indian response to apologies is अँगरेज़ तो चले गए लेकिन, येह सॉरी शब्द यहीं छोड़ गए (the English have left, but they have left behind this wordsorry). Indians will accept a change – complete and total change in behaviour! Satori! The flash! Indians will give a second chance to even criminals and robbers – without an apology!!

But empty apologies? Bad idea! Like Valmiki (the writer of Ramayana) did not apologize – but, instead he reformed! Or the many dacoits (Phoolan Devi et al) in the recent past, who were elected to the Indian Parliament.

Five -Kaplan in knots

Kaplan’s finds “migrants … Muslim, from throughout India have been streaming into Gujarat” and Kaplan also “encountered … alienation from India, evidenced by their withdrawal into their own communities …”

Two comments spaced a few paragraphs apart, and the contradictions become clear. If he cannot understand this anecdotal ‘inconsistency’ he should either flag it or exclude it. What he is doing, is hiding it!

Six -The best of the trash

Obama and Modi comparison! Now that is interesting!

This is the only bit I liked in that entire article. Leaving his (one-legged, Godhra riots based) commentary aside, I would like to see a second Black person become a President of the USA. Just like there never has been a Catholic President, ever – except once, who was murdered!

Obama is tokenism.

In the last 60 years, in 15 US elections, only one bald US president has been elected – and only 5 bald presidents in the 233 years of Republican US. Seemingly, the US Voter and political system selects people with a headful of hair! And we are not even started on a woman president or a Muslim President! Worry about the prejudices and biases of the American Voter, Mr.Kaplan. India has had numerous Muslims in important positions – Supreme Chief justices, Presidents (two of them, at last count), many Central Government Ministers!

It has taken nearly 60 years for Narendra Modi’s ‘right-wing’ Indian, ‘Hindu fundamentalist’ party to come to power – and lose it. They have been given opportunities at the states – and been suitably rewarded and punished – based on performance. The Indian Voter has voted the ‘Communists’ and the ‘Fascists’, fundamentalists and liberals, of all shades and colors – in and out of power. Indian Voters are smart enough and know what is good for them.

Kaplan takes a misguided statement of a misinformed (by propaganda as education) Indian, Vijay Chauthaiwale, a molecular biologist that “They (the Muslim) conquered … we lost. The British conquered. We lost. We were a defeated society. We needed to come together as Hindus.” This is so juicy and tempting!

Would Kaplan take the word of an American molecular biologist on history as close-to-truth. If he did, The Atlantic, would throw him out faster than he can spell history.

Is this propaganda or opinion? History, it ain’t, Mr.Kaplan!!

Let us go to the ancient world.

The expansion of the Eyptian Slave Empire, led by their Pharoah Thutmose III, was stopped at the Battle of Megiddo (1468 BC) – by an Indo-Aryan alliance of Mittanis, Amurrus and Cannanaites. It is the Battle of Megiddo, from which the Biblical Armageddon is derived, meaning, ‘mount of Megiddo’. The alliance led by “king of Kadesh with the support of troops and money from the Mitanni, the great power to the north,” was able to take on the might of the Egytian armies under Pharaoh Thutmose III.

Or the three important battles of the ancient world. Ramesis-II at the Battle of Kadesh!! Semiramis, whose Assyrian Empire, was finally dissolved after WW1, tasted a horrific defeat in her Indian campaign. The resounding defeat of Cyrus The Great at the hands of the Indo-Scythian alliance is rarely recounted in modern history.

The first foreign-Islamic ruler in Delhi, Qutubuddin Aibak, was in 1206 by which time large parts of Europe were already under Islamic rule for more than 400 years, from 8th century itself. Within 200 years, by 1400, the Ashvakans (these days known as Afghans) Lodhis and the Moghuls re-took New Delhi from the Khiljis – which ended foreign rule in India. Many Indians are still victims of colonial propaganda – which shows India as ‘defeated society’. Kaplan is either a (unlikely) victim of this propaganda or a (most probable) part of the problem? Either way, bad job!

And you Ananya, should know better.

Eight -Small things that actually mean big things

He comments on how Narendra Modi wore “traditional paijama pants and a long, elegant brown kurta—ironically, the traditional dress of India imported by the Mughals.”

I got bad news again for you, Mr.Kaplan.

India is the only culture in the world to have unisex clothing. The plainsmen and women wore the 5-yard dhoti and saree – and the hills people wore the tubular top and leggings. And this is one of the many things that Alexander’s armies learnt in India. Macedonian national dress is the salavaria!

Nine-Where would India be without the British Raj

Kaplan can’t resist crediting the British! His desperation to credit “The British, by contrast, brought tangible development, ports and railways, that created the basis for a modern state. … the British, despite all their flaws, advanced an ideal of Indian greatness”.

His Master's Anticipation - 'Uncivilized Indians fighting with each other like animals

At the end of WW2, Britain was a superpower, intact with its huge colonial Empire – apart from the massive debt that it owed the US. With Germany defeated and Hitler dead, Italy in shambles and Mussolini hanged, Britain sat at the head of ‘high tables’ in the post-WW2 world (with the US), deciding the fate of the nations.

Britain today, a shell of its former self – with its manufacturing hollowed out, its agriculture in shambles, its economy on the verge of being relegated to the Third World is a huge descent. Much like Spain after Haiti.

India has in the meantime, led by ‘men of straw’, has moved from being a ‘ship-to-mouth’ basket-case, to a significant economic and political success. Yet, the British colonial administrators needed to prove that only they could rule over India. Indians were after all‘men of straw … of whom no trace will be found after a few years’. And they were led by ‘half naked fakir‘. If Britain was indeed so good at its job, why can’t they do anything to save themselves from this terminal decline.

For all this, we owe a debt of gratitude to the British, Mr.Kaplan? Can you make up a better story please, next time!

Next time, Ananya

I could have easily made it ten or even a dozen falsities by Robert Kaplan – but does he deserve so much attention or time, Ananya? Will you rise to any two-bit of writing that denigrates India – using Narendra Modi (or someone else next time) as a human shield?

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